The Senate may stop a controversial proposal from the Small Business Administration that would limit the type of set-aside contracts given to women-owned small businesses.

A 40-word provision in the Senate’s version of the fiscal 2009 Financial Services and General Government Appropriations Act (S. 3260) would block the proposed rule. The rule would allow agencies to set aside some contracts for women-owned small businesses, but the proposal would only allow the set-asides in four select industries, such as kitchen cabinet manufacturers.

The bill would prohibit the "Small Business Administration from implementing a proposed rule that would limit the use of sole-source contracts for women-owned small businesses to only four industries,” the Senate Appropriations Committee wrote in a report on the legislation. The committee approved the bill July 10. The House Appropriations Committee has approved its version of the legislation, but specific provisions have not been made public.

The Senate bill's language would allow for a women-owned business set-aside program but would strike the proposal the SBA published in the Federal Register on Dec. 27.

That proposal caused opposition among small-business advocates in Congress. Sen. John Kerry (D-Mass.), chairman of the Small Business and Entrepreneurship Committee, called SBA’s proposal “a slap in the face to women business owners.”

Former SBA administrator Steve Preston said the SBA used a methodology recommended by the Rand Corp., which studied the issue for the agency, and found the four industries where women were underrepresented: national security and international affairs; coating, engraving, heat treating and allied activities; household and institutional furniture and kitchen cabinet manufacturing; and motor vehicle dealers.

However, Rand identified other ways to measure the number of women business owners in federal contracting, which experts say would have revealed a broader range of industries where few women-owned businesses receive contracts.

Preston said the SBA decided to measure women's representation by the dollar value of contracts awarded to women-owned small businesses. The agency chose this approach because dollar amounts can easily be compared across agencies, programs and industries.

Currently, the SBA is reviewing comments on its proposal.